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New Mexico Lawyers Serving New Mexico's Legal Needs Since 1997

February 2014 Archives

Colliding with the Car of an Uninsured Driver

A New Mexico resident driving on the roads within the state gets in to an accident. The driver of the other vehicle causes the collision but does not possess any insurance coverage at the time. The New Mexico resident is injured and wants compensation for the costs of medical treatment and recovery. Since a claim against the other driver has little if no constructive purpose, as that driver lacks automobile insurance coverage, and likely will have insufficient personal assets, the fallback option is for the victim to make a claim against her own insurer under the terms of her uninsured/underinsured motorist coverage.

New Mexico Supreme Court Resolves Long-Standing Water Dispute

In New Mexico, the Public Regulation Commission (PRC) grants licenses to and regulates various utilities who want to operate within the state including water utilities. Back in 1983 the PRC issued Moongate Water Company, Inc. (“Moongate”) a certificate of public convenience and necessity (CCN) which authorized the company to provide water to a specific area – known as the “certificated area”- located outside the city limits of Las Cruces.  When the City of Las Cruces later annexed three undeveloped tracts of land which happened to lie in a portion of this certificated area, the City further decided that its own municipal utility would provide water to residents and users in the newly-annexed area.

Sales of Homes in Metro Albuquerque Continue to Rise

The Greater Albuquerque Association of Realtors announced that the recovery of the metropolitan Albuquerque real estate market continued to pick up steam in 2013. The sale of 9741 single-family homes last year reflects a return to the level of sales experienced back in 2002 and constitutes the highest level of sales since the period of 2004-7 before the financial crisis.

City of Detroit Submits Plan of Adjustment in Bankruptcy Case

The City of Detroit, the largest municipality in the country to avail itself of bankruptcy protection, submitted its Plan of Adjustment to the federal bankruptcy court handling its case. This plan represents the blueprint for how the city seeks to pay its creditors and raise funds to pay for ongoing services and municipal investments as the plan is instituted. The plan of adjustment must be approved by Bankruptcy Court Judge Steven J. Rhodes presiding over the Chapter 9 bankruptcy matter.

Being Careful about One’s Agreements

Parties finding themselves in default of a contract have a strong incentive to cure that default. Often, however, the urgency to remove oneself from a precarious legal posture can lead to even greater future jeopardy. As an instructive example, the case of Rehm v. Parra Family Limited Part, No. 32,200 (Ct. App N.M. 2013) shows how a limited partnership seeking to desperately hold on to some commercial property unwisely went too far in waiving some of its significant rights.

New Mexico Legislature Approves Ban on Texting While Driving

Senate Bill 19 which gives police officers authority to stop and cite drivers for texting while driving their motor vehicle passed the New Mexico House by a near-unanimous vote of 62-1. As it already received approval in the Senate by a 37-5 margin, the legislation goes to Governor Martinez’s desk for her expected signature.

Bankruptcy Trustee Gets Green Light to Pursue Pension to Recover Fraudulent Transfers

When an individual or company files for bankruptcy protection, a duly-authorized trustee takes control of the estate. So long as the bankruptcy action continues, the trustee on the case has the standing to seek to recover any assets or funds he or she believes to be part of the estate. Last year the federal bankruptcy court held in the case of In re Vaughan Co., Realtors, 493 BR 597 (Bankr. Court, D. New Mexico 2013) that the trustee had the authority to seek recovery of certain funds paid by the debtor (Vaughn), as part of an alleged Ponzi scheme, to a pension plan (defined benefits plan) called Ultima Plan. The trustee of the plan also owns Ultima Homes which agreed to build a home for Mr. Vaughn. The bankruptcy trustee contends that the Vaughn Company may have fraudulently transferred funds to the Ultima Plan in exchange for Ultima Homes constructing a home for him personally.

When Is a Contract not Really a Contract?

Tesla Motors, Inc.  and the Rio Real Estate Investment Opportunities, LLC (“Rio”) entered into what was entitled the “Development Agreement” on February 19, 2007.   Under the terms of the agreement, Rio planned to build a 150,000 square foot facility for the electric car manufacturer in Bernalillo County, New Mexico where Tesla owns property.

Right to Paternity Test and Grandparent Visitation after Father’s Death

Last year the New Mexico Court of Appeals held in the case of Estate of Swift ex rel. Swift v. Bullington, 309 P. 3d 102 - NM: Court of Appeals 2013 that Ricky Swift (grandfather), who was also a legal representative of his deceased son,  had the standing to find out if a child, was the  biological son of the grandfather’s deceased son. The Court of Appeals, in the same opinion, granted the grandfather grandparents’ visitation rights to see the child, provided the paternity was positively established.

Three Factors Informing Business Formations

 When an individual or group aspires to start a new business, one of the major decisions that must be made is what kind of business entity should be formed to operate the business. This means figuring out whether to form a corporation or partnership or operate the prospective business as a sole proprietorship, and, if choosing one of the former two, whether to be taxed as an S Corporation, a C Corporation, or a limited liability company (“LLC”). 

New Option for Dealing with Building Code Violators

While many cities and states impose civil fines and penalties on builders who fail to meet building code standards, the law of the city of Albuquerque recognizes such violations only as matters to be tried in criminal court. The rationale that such punitive remedies would effectively curtail code violations is, according to some, misguided. The problem stems from the difficulty and high level of proof necessary to convict a violator of failure to comply with code. The prosecution of these offenses can be time-consuming. Further, the City must meet criminal law’s “beyond a reasonable doubt” standard of proof to succeed in a code violation case. This higher standard of proof may be suitable for ensuring that criminal defendants do not get convicted unfairly but this burden makes no sense for the enforcement of building codes.

Bankruptcy Trustee Loses in Bid to Recover for Estate Transferred by Debtor

In any bankruptcy action, the trustee has the capacity to recover any funds which he or she believes was improperly transferred or paid from the debtor’s estate prior to the bankruptcy filing. The law gives the trustee this power to ensure either that individuals close to the debtor do not take advantage of the debtor or that the debtor does not collude with someone to move some of the assets out of the estate until after the bankruptcy. A bankruptcy decision rendered last year by a federal bankruptcy court in New Mexico rejected a trustee’s attempt to recover funds from a woman who had resided with the debtor and commingled funds in a single bank account with her for several months prior to the debtor filing for bankruptcy protection.

Environmental Groups to Quick to Sue in Land Use Case

The Combined Hydrocarbon Leasing Act of 1981 allows lease holders who have permits to use the land for oil and gas extraction to convert those permits to CHLs (combined hydrocarbon leases). Such a conversion would enable the lease holder to produce oil from tar sands, a process that requires an external energy source to separate heavy and viscous crude oil from the sedimentary rock in which it is attached or combined. The Bureau of Land Management (BLM) has the authority to accept or reject applications from lease holders to convert land to this use.

Daubert Standard Provides Judges with Standards to Assess Validity of Scientific Testimony

When parties in a civil or criminal trial seek to present testimony from scientists, doctors and other scientific or technical experts, the trial judge must first determine if the proposed evidence possesses sufficient reliability to be considered by the jury. The judge must apply what is known as the Daubert standard in making such assessments. Named after the two-decades old case of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the Daubert decision supplied courts with a new set of standards to make a preliminary assessment of whether an expert’s scientific testimony is based on reasoning or methodology that is scientifically valid and can properly be applied to the facts at issue.

Drunk driving offender repeats fatal offense in Belen

A New Mexican man, who pled no contest in 2008 to criminal charges of vehicular homicide and DWI, recently repeated his behavior resulting in a tragic accident which caused the death of a 51-year-old man and injuries to the man’s daughter when his motorcycle collided with their vehicle. The innocent man died instantly. His daughter continues to recover at UNM Hospitals.

FDIC brings tort action against former officers of New Mexico bank

When a bank goes into receivership, bank executives should not assume that any losses the bank itself or its shareholders sustains will be the sole losses. The Federal Deposit Insurance Corporation (FDIC), acting as the receiver of the First Community Bank, sued former officers of the Bank for close to $15 million in federal court. Known for decades as the First State Bank of Taos, the failing First Community Bank entered receivership on January 28, 2011; the FDIC was appointed as receiver.

Tentative agreement in case involving shooting of Iraq war vet shows how bargaining does not end with verdict

The family of Ken Ellis, an Iraq war veteran who was shot by the Albuquerque police when he had placed a gun to his own head, agreed to settle the case with the City of Albuquerque for almost $8 million. This comes after the family prevailed before a jury to secure a verdict that topped $10 million last March.  Why would the family, at the post-verdict juncture, agree to a settlement that was about 80 percent of the original award? 

U.S. District Court for District of New Mexico retains case claiming hospital misconduct

The U.S. District Court for the District of New Mexico decided in Williams v. Board of Regents of University of New Mexico, et. al. (No. CIV 13-0479 JB/WPL 2014) to retain jurisdiction of a case brought by the parents and conservator of a mentally-ill young man whose condition deteriorated after he was admitted to various hospitals and institutions owned or controlled by the defendants sued in this action. For a period of four months from January to April 2011, the young man was transferred to several facilities against the wishes of his conservator and his parents; furthermore, he was not given the psychotropic medicine which he was prescribed and did not receive appropriate treatment for his particular condition. At the end of the four-month period, he was ultimately diagnosed with intermittent explosive disorder, a psychotic disorder and traumatic brain injury.  He no longer could “engage in meaningful conversations with his mother”and “remained in a volatile mental state”in which he was “periodically dangerous to himself and to others.”

The necessity of title searches to ensure clear title

For many immigrants, the dream of home ownership was one of the reasons they came to America. Since the early days of our republic, counties maintained collections of documents detailing real estate transactions and property liens. For generations, professionals in the real estate industry have searched through courthouse records to ensure that the property in question rightfully belonged to the person or company claiming to be the owner. While computers have made this task easier, it is still necessary to conduct a thorough search.

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